Hadley v Przybylo - Court of Appeal Clarifies Recoverability of Rehabilitation Costs in Catastrophic Injury Claims

Judgment has been handed down by the Court of Appeal in the case of Hadley v Przybylo [2024] EWCA Civ 250, a much-anticipated judgment on the recoverability of costs in attending MDT meetings and liaising with case managers and financial & health and welfare deputies. The Claimant’s appeal against costs connected with rehabilitation being automatically irrecoverable as a point of law is allowed, but the need for costs to be reasonably and proportionally incurred remains.

The claimant had appealed against an earlier cost budgeting decision of Master McCloud taken in March 2023 (judgment given on 22 June 2023) to disallow £52,000 worth of future costs on the basis that the costs were not going to be incurred in progressing the litigation.  

The key issue to be determined was whether costs for attendance at MDT meetings and liaising with the claimant’s case manager and financial deputy are recoverable as a matter of principle and, if so, whether the Court should place any limits on the recoverability of these costs or leave it open for arguments at costs management or detailed assessment. 

The outcome – costs of attending MDT meetings and liaising with the case manager or deputy may be recoverable, but not always. As was the case before today’s judgment, costs must be reasonable and proportionate, and it remains open for defendants to challenge these costs at detailed assessment. 

Case analysis

The case arose following a road traffic collision in June 2020. The claimant’s vehicle was stationary at a junction waiting to turn when he was hit from behind by the defendant’s vehicle and shunted into another oncoming vehicle. The claimant suffered catastrophic injuries. He was hospitalised for several months before being transferred to a specialist rehabilitation unit. He was discharged into the community in Summer 2022, supported by a team of carers. Liability for the claimant’s accident was admitted. 

A case and cost management hearing took place before Master McCloud in March 2023. The claimant had filed a cost budget totalling £1.18 million, over £500,000 being incurred costs. The parties were ordered to engage in ADR in respect of cost budgeting which they did. By the time of the cost management hearing in March 2023 the only significant area of dispute between them related to future costs within the Issue and Statement of Case phase. The defendant argued that the claimant’s estimated costs for this phase were excessive. Master McCloud asked herself whether attendance at MDT meetings was progressive to the litigation and concluded it was not. The claimant’s budget was reduced to remove costs which Master McCloud deemed as non-progressive. Permission to appeal was given.    

By the time the matter came before the Court of Appeal the claim had been compromised on a capitalised basis at £14.5 million. The settlement is awaiting approval. The only live issue between the parties was costs. 

The Court of Appeal was asked to determine:

1. Did Master McCloud determine a point of principle in stating that to be recoverable the costs must be progressive? 
2. Are costs associated with the claimant’s rehabilitation recoverable and if so, should the Court place any limits on the recoverability of these costs or leave it open for detailed assessment? 

The Court of Appeal concluded that there was little difference between the positions taken by the parties at the appeal – the defendant accepted that recoverable costs could include interim remedies, and this may include funds for rehabilitation – and the real issue between them was the defendant’s complaint that claimant’s solicitor's attendance at routine meetings was unnecessary and generated excessive costs. 

It was held that the Master’s categorisation of items of cost needing to be progressive to be recoverable was “unhelpful” and if an item of cost had to materially progress the case to be recoverable there would be some items of cost which would inevitably not meet this test, but which do fall within the wider test of s51 Supreme Court Act 1981. 

The Court of Appeal held that costs associated with attendance at rehabilitation meetings may be recoverable, subject to reasonableness and proportionality. The Court drew upon The Serious Injury Guide and the Rehabilitation Code which envisaged involvement of solicitors in rehabilitation, in concluding that, as a matter of principle, this is a recoverable category of costs. 

However, the Court stated that it would be wrong for claimant solicitors to assume that the cost of attending MDT meetings is always recoverable; it is fact specific, and the recoverability of these costs is a matter for the cost judge. 

The Court stated that: 

• Recoverability of costs will depend on the application of the 3 criteria in Re Gibson’s Settlement Trusts 
• Reasonable and proportionate costs of the claimant’s rehabilitation which meet the above criteria will generally be recoverable in accordance with Brown v Alexander, The Serious Injury Guide and the Rehabilitation Code  
• The extent to which time spent by the solicitor on rehabilitation matters will be recoverable is always fact specific. It would be unwise to set guidelines or rules on this point to apply in every case. 
• It is wrong to assume that a generic category of costs is irrecoverable but also equally wrong to assume that a generic category of cost is automatically recoverable; it depends on the facts of each case. 

Whilst the claimant’s appeal was allowed, which may be seen as a victory for claimants, any suggestion that this decision gives claimant solicitors free reign to attend all routine MDT meetings and incur significant cost in doing so, is incorrect; the recoverability of these costs will be a matter of fact in each case as it was prior to today’s judgment. 

There is certainly great merit for the parties to work collaboratively and part of this can include information sharing through attendance at MDT meetings in high value claims, but both parties need to be alert to situations where attendance at such meetings may not be justified, particularly if meetings are routine and wider issues are not being discussed. In those circumstances, distributing the notes of those meetings to the legal teams may be sufficient and attendance at such meetings may be deemed disproportionate and therefore irrecoverable. 
 

View the full judgment here

Emma Palmer is a Senior Associate and a member of the Care, Statutory Funding and Rehabilitation SMG. Paul Wainwright is a Partner and leads our costs practice group.
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